'Pokemon Go's maker has axed a quarter of its staff.

Niantic - whose augmented reality game smashed download records in Apple’s App Store when it was released in 2016 - is feeling the effect of the video games sector’s sluggish performance and is reacting to the conditions by letting go 230 people, can two games in development and shut its Los Angeles-based studio.

Their CEO John Hanke said: "We have allowed our expenses to grow faster than revenue.

"The top priority is to keep Pokemon Go healthy and growing as a forever game.

He went on to say that since the mobile game’s debut "the mobile market has become crowded and changes to the app store and the mobile advertising landscape have made it increasingly hard to launch new mobile games at scale."

Along with making roughly 25 per cent of its workforce, Ninatic is also ceasing the ‘NBA All-World’ game and halting work on its ‘Marvel World of Heroes’ game.

When it launched, ‘Pokemon Go’ became an international sensation as players were able to go into to the world to ‘catch’ Pokemon in certain locations in the real world, but it was condemned when people got themselves into all sorts of trouble like trespassing and causing car crashes to snatch up all the offerings.

Last summer, Niantic announced another retrenchment strategy when it declared they were pulling the plug on four projects and getting rid of eight per cent of its staff.

At the time, a rep said: "We generally don't comment on third-party estimates of our revenue as they are often incorrect, which is the case here.”